Correlation Between Queens Road and Capstone Mining

Can any of the company-specific risk be diversified away by investing in both Queens Road and Capstone Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Queens Road and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Queens Road Capital and Capstone Mining Corp, you can compare the effects of market volatilities on Queens Road and Capstone Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Queens Road with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queens Road and Capstone Mining.

Diversification Opportunities for Queens Road and Capstone Mining

0.41

Correlation Coefficient

Queens Road  Capstone Mining

Very weak diversification

The 3 months correlation between Queens and Capstone is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp and Queens Road is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Queens Road Capital are associated (or correlated) with Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of Queens Road i.e., Queens Road and Capstone Mining go up and down completely randomly.

Pair Corralation between Queens Road and Capstone Mining

Assuming the 90 days trading horizon Queens Road Capital is expected to generate 0.74 times more return on investment than Capstone Mining. However, Queens Road Capital is 1.35 times less risky than Capstone Mining. It trades about -0.03 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about -0.04 per unit of risk. If you would invest  700.00  in Queens Road Capital on December 29, 2024 and sell it today you would lose (49.00) from holding Queens Road Capital or give up 7.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Queens Road Capital  vs.  Capstone Mining Corp

Queens Road Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Queens Road Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Queens Road is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Capstone Mining Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capstone Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Queens Road and Capstone Mining

The main advantage of trading using opposite Queens Road and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Queens Road position performs unexpectedly, Capstone Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Capstone Mining will offset losses from the drop in Capstone Mining's long position.

The idea behind Queens Road Capital and Capstone Mining Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.